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Draft SEC regulation prohibits digital asset operators from offering depositing and lending services
12/10/2022
The Securities and Exchange Commission (SEC) has released a new draft regulation designed to restrict digital asset exchanges from being used as a way for clients to gain benefits through depositing and lending services. These plans have been introduced in order to protect investors and the public against fraud.
The upcoming regulation comes at a time when the SEC is continuing to tighten its rules governing digital asset businesses. The draft regulation is currently undergoing the public hearing process until October 17, 2022.
Key points
- The draft regulation is in the public hearing process until October 17, 2022.
- Digital asset operators will be prohibited from taking deposits in the form of digital assets and lending or investing those assets and then offering returns made on such transactions to depositors.
- Digital asset operators will also be prohibited from advertising or encouraging others to offer deposit and lending services.
What activities are prohibited by the regulation?
Under the proposed regulation from the SEC, digital asset operators will be prohibited from taking deposits in the form of digital assets and lending or investing those assets and then offering returns made on such transactions to depositors.
Therefore, digital asset businesses will not be allowed to offer returns to depositors of digital assets, without using the asset for investment or seeking other benefits. However, any revenue gained from a sales promotion in accordance with the SEC’s rules is allowed.
Also, the regulation will prohibit digital asset operators from advertising or encouraging others to offer deposit and lending services. For example, the companies must act as a channel for their clients to use deposit and lending services abroad via their platform or application.
Are there any exceptions to the regulation?
The regulation provides the following exceptions in relation to engaging in the activities as specified above.
The exceptions will apply to the following events:
-
- Depositing of the digital assets as a consensus mechanism such as Proof of Stake (PoS) in case that the digital assets business operator operates as a blockchain developer.
- Giving or transferring the digital assets to the customer in case that the digital assets business operator receives such digital assets via hard fork, soft fork, or air drop from the digital asset issuer.
- Transferring the digital assets by the order of the customer without utilising the benefits of such assets.
The following exceptions apply in relation to the advertising of deposit/lending services:
- Providing general information for DeFi platforms without any using any terms to tactics to encourage the use of such a platform
- Engaging in the scope of activities as authorised in the companies digital asset licence.
How can Belaws help?
For more information about how this regulation may affect your digital asset business, why not talk to one of our experts now?
Please note that this article is for information purposes only and does not constitute legal advice.
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Frequently asked questions
Can a foreigner open a company in Thailand?
Yes it is possible for a foreigner to open a company in Thailand. There are also options available which allow 100% foreign owned companies as well.
How much does it cost to set up a company in Thailand?
The official fees for registering a company in Thailand are THB 7,500.
How do I start a limited company in Thailand?
- Step 1: Choose and register a company name.
- Step 2: Draft and file the Memorandum of Association.
- Step 3: Call and hold a Statutory Meeting of the shareholders
- Step 4: Register the Company with the Ministry of Commerce.
- Step 5: Register the company for Value-Added Tax (VAT) and Income Tax
Is it good to start a business in Thailand?
Thailand is an attractive option for those wishing to start a business. Thailand has a great infrastructure in place and scheme such as the BOI provide great incentives for companies to take advantage of.
How much money do you need to start a business in Thailand?
Typically, it costs between THB 40,000 to THB 60,000 (excluding VAT and Government fees) to start a business in Thailand.The official fees for registering a company in Thailand are THB 7,500.
How can a foreigner start a small business in Thailand?
Yes, foreigners can start a business in Thailand. However, certain business activities are restricted by the Foreign Business Act and in order for businesses to undertake them they must obtain a Foreign Business Licence/Certificate which can be time consuming and complicated.
What is the biggest problem in Thailand?
The biggest problem facing foreign owned companies is being able to undertake their desired business activity as a 100% foreign owned company. Many business activities are protected by the Foreign Business Act and in order for a company to operate in these protected industries, they will be required to be majority owned by Thai Shareholders (unless a BOI promotion has been obtained).
Why is it hard to do business in Thailand?
The Foreign Business Act limits to the business activities a 100% foreign owned company can undertake. This means Thai Shareholders will need to be sought or a BOI promotion obtained in order for a company to legally operate.
Can I own a company in Thailand?
Yes, foreigners can start a business in Thailand. However, certain business activities are restricted by the Foreign Business Act and in order for businesses to undertake them they must obtain a Foreign Business Licence/Certificate which can be time consuming and complicated.
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